HOUSTON -- Three million dollars isn't much when it comes out of a $1.7 billion municipal budget, but it's enough to toss the city of Houston's financial plans out of balance as the year 2009 comes to a close.
City Controller Annise Parker and Finance Director Michelle Mitchell presented a report to the City Council Wednesday morning that indicates city leaders will need to find $3.3 million in additional savings somewhere in the budget, because tax collections are lower than projected.
The variance is small -- just a fraction of one percent of the overall budget -- but it means some small projects may need to be postponed, said Councilmember Anne Clutterbuck.
A series of relatively small but unanticipated fluctuations in October's tax collections added up to the new shortfall, Parker and Mitchell said. One was heavy rain. The city's Combined Utilities System, which runs the water/sewer system, collected $6 million less in water bills in October because residents watered their lawns less than anticipated.
The other major problem is delinquent property taxpayers. According to Mitchell, the number of Houston residents that did not pay their property taxes in 2008 jumped dramatically, and efforts to collect those dollars have been less successful than city and county leaders expected. The change has blown a $3.7 million hole in the city's budget, Mitchell said.
The city's budget has improved in other areas, however, which helped balance the shortfall. According to Parker, more employees retired or moved to the private sector this year than some city leaders expected, and by not filling most of those positions, the city has saved money.
Mayor Bill White said closing the gap should not be especially difficult, given the overall size of the city's budget and the fact that the fiscal year is only half over. He said the city will move more aggressively to sell surplus property to help make up the difference.
Clutterbuck, who chairs the budget committee, said city leaders will have to make "hard decisions" and cut planned programs in order to keep the budget from sliding into the red. The city has already dedicated the money in a savings account to close gaps that already exist, she said.
"Small and large savings must happen now and we must have the political will to do it, if we're going to avoid the difficult issues of furloughs and layoffs that other cities are facing right now," Clutterbuck said.
